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Pay TV Survives Housing Crash, Hulu's Rise
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Pay TV Survives Housing Crash, Hulu's Rise - 09-March-2009, 16:45

With the housing market crash and the rise of free video on the Web from sites like Hulu, you'd think that the pay TV industry might have felt a pinch last year. Not the case.

At the end of 2008, almost 80 million U.S. households paid for TV service from a top cable, phone, or satellite provider. That's about 1.5 million more households than paid for TV at the end of 2007, or about 2% growth.

Will the industry grow again in 2009? Or will it lose customers this year?

That depends on what happens with the economy -- and how many people cut the cord. But it also depends on how successfully they can win back some momentum as more video (and attention) shifts to the Web.

The big cable companies, at least, have some ideas. Comcast, for example, plans to roll out a service tentatively called OnDemand Online, which will open up a massive library of exclusive Web video content only to Comcast TV subscribers.

So who won and lost last year?

The big winners: AT&T (T) and Verizon (VZ), which collectively gained almost 1.8 million subscribers to their fiber-optic U-Verse and FiOS TV services. They finished 2008 with a combined 3 million fiber TV subscribers -- up from zero just a few years before.

Satellite provider DirecTV also had a good year, finishing 2008 with 17.6 million subscribers, up from 16.8 million subs the year before.

Meanwhile, top cable companies Comcast (CMCSA), Time Warner Cable (TWC), Charter (CHTR), and Cablevision (CVC) combined to lose about 1 million TV subscribers. But they made up for it with high-speed Internet and digital phone customers that they won away from phone companies. (More on that another day.)
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